Unemployment in Europe - social and economy impact, dangers, solutions Cross border mobility in Europe and what appealing labor markets still are in Europe's main regions ( Western, CEE, SEE)
Author: Monica Vrabiescu, Managing Director
In accordance with Eurostat News Release issued on February, 1st, 2013, the unemployment rose by 1.763 million in the EU27 and by 1.796 million in the Euro zone (EU17) during 2012, reaching an unemployment rate of 10.7% and respectively 11.7% in December 2012. In both zones, the unemployment rates have markedly raised compared with December 2011, when they were 10.0% and 10.7% respectively, while Romanian market has passed through a positive decrease from 7.5% to 6.5%.
As a common indication, the changes in the unemployment rate are linked to the economic situation, in general and the countries’ economic, social and political context, in particular. Although the unemployment is nowadays the main concern for many countries as one of the major consequences of the crisis period, we should also look from a global perspective to the workforce characteristics and its evolution for the next decades as shown by the Harvard Institute’s study about “Population Aging - Facts, Challenges, and Responses” which highlights the followings:
“At the global level, the number of those over age 60 is projected by the UN Population Division to increase from just under 800 million today (representing 11% of world population) to just over 2 billion in 2050 (representing 22% of world population).” The fact that population aging is occurring and the need for replacement will increase in both developed and developing countries do raise new challenges and measures to be taken in adequately supplying and adapting the corresponding workforce on all levels: individual, organizational and societal.
Starting from the observation that before the crisis most of the EU member states showed increasingly efficient matching between unemployment and job vacancies, further analysis of present socio-economic data might seem as a contradiction in terms: currently, there are around 2 million job vacancies across the EU and in the meantime higher levels of unemployment are registered!
These findings leaded to an assessment of the main characteristics and challenges of the labour market within the EU member states initiated by the EU Commission and launched as part of the EU's overall strategy until 2020 to promote sustainable and adequate growth.
The outcomes of the assessment are underlining the mismatch between skills and labour market needs together with its main indicators, as follows:
• structural unemployment – as mismatch between labour demand and the skills and location of potential employees;
• skills mismatch – as skills deficit (gap) or skills underutilization (over-skilling);
• qualification mismatch – as under- or over-education (which could increase unemployment rate at highest level of education attained);
• job vacancies in relation with mobility rates;
The results of the assessment conclude that “there is urgent need to step up measures to improve labour market matching by adapting education and training systems to provide skills and competencies in future job-rich sectors -notably in the green economy, health care ,green and ICT sectors, by supporting occupational and geographical mobility through better cooperation between employers and employment services and by targeting young people through the development of partnership based approaches for apprenticeships and quality traineeships.”
The EU Labour Survey realized by Eurostat in 2012 regarding regional and sectorial mismatch shows that “high disparities between regions and between industries may indicate that there is a serious problem in such regional mismatches which might be exacerbated if wage developments –and more in general the cost of living — do not take account of these differences”.
As a concrete measure, the EU Commission has launched by the end of 2012 “the EU Skills Panorama, a website presenting quantitative and qualitative information on short- and medium-term skills needs, skills supply and skills mismatches”.
Given the workforce discrepancies between the EU member states at different indicators, this measure and associated guidelines are to be adequately enforced and implemented by each state.
In a recent regional study conducted by HILL through its offices in 21 European countries and referring to the labour market conditions in general and including cross-border mobility in Europe, the results have shown that there is a shortage of adequately skilled workforce and thus interest to hire personnel from CEE countries in some of the Western European countries, mainly in Austria, Germany, UK besides Russia, Turkey, Ukraine. The study also revealed that there is an increased interest from young professionals aged up to 30 years old from CEE countries to relocate to a Western EU country but who are also willing to move to another continent, as well.
The summary of findings leads to the conclusion that measures from different perspectives are to be implemented in order to cover generations’ gap and adjust job-skills matching. From the individual and organization perspectives, the measures should focus on in-depth analysis of job related needed skills and competences together with assessment of the existing ones, succession planning, enhancement of existing internal workforce potential and corresponding educational system.
The “most wanted employee”: skills, competencies, recruiting manners
Anca Raican, Business Unit Manager
When it comes to enlarging upon a profile (regardless the functional area we may address, still sticking to managerial profiles), most common requirements refer to: a certain level of expertise in respective area in order to meet the requested range of responsibilities, a set of competencies and specifications regarding the personal profile. So far, so good, all clear and thus laying the ground for designing the most appropriate modality of reaching the targeted segment. Still, there are additional elements meant to give a fine tuning and thus enhancements like - i.e. similar industry experience, similar business model preferably, sound strategic thinking, change management exposure, strong people management skills, highly open and flexible individual with well-secured inner motivation to achieve – occur, shaping an “ideal profile” and finally turning into the “most wanted employee”.
There is a more and more “copy-paste” - focused approach, this coming out as generated of the rapid return on investment need business environments have been passing through over the last years and thus imprinting a highly efficient pace to the recruiting process by targeting the “business community” expected to match the required profile to a high extent. Roughly, well-rounded individuals are in the limelight.
Safe solutions in the crisis: internships, outsourcing, staff leasing
Author: Andreea Pop, Senior Consultant
The economic crisis accelerated the rhythm on the labour market, companies are looking for already experienced employees, not having the luxury anymore to spend the needed time&money for long-term trainings. An internship program represents in this respect an important advantage for a new employee vs. a fresh graduate with no previous experience during the hiring process.
According to “The Telegraph” an increasing number of British students are choosing to leave universities in order to attend internships, which they consider that prepare them much better for the labour market than the university and it’s also much cheaper, having the chance of being paid for it in some cases (around 50% of the internships are paid).
In the US it seems that, once the economy crashed, many jobs were re-packaged as internships, promising experience and career connections in exchange for free labor, with reduced chances for getting hired in the company once the internship is over.
In Romania the internship programs are increasing in number, according the 2012 job fair Top Employers, the most important aspect for employers being their interest in selecting from all the attendants the top performers to be hired in the company after the internship period. However, we need to underline that in Romania the internship programs are initiated and based mainly on the internal decision and policy of the companies while there is a lack of initiative from the universities’ side. In the same time, in order to achieve the expected outcomes of the offered internship program, there is an increasing need from the companies’ side to establish and implement procedures, best practices in selecting the appropriate applicants in accordance with their potential, skills and abilities which are to be further developed. Even if the costs of the internship programs are lower from the company’s perspective than in the case of hiring for a probation period, the failure in the preparation for a new employee due to mismatch of applicant’s abilities and job requirements would be detrimental for the organization as well.
Outsourcing and staff leasing represent money efficient alternatives for companies for benefiting of the needed personnel during times of activity peaks or in case of having limited headcount for a certain branch. This alternative has been seen during the crisis as a method of saving costs with personnel administration but still having the possibility of running the business at full capacity with the necessary functions in the company.
The outsourcing is a large theme addressing to different sectors with pros and cons and therefore it worth a separate discussion.
